Boken kap 3 del 1 Flashcards
What does x mean?
ROE
ROA
EPS
NCF
CF(O)
CF(I)
CF(F)
PE
ROE = return on equity
ROA = return on assets
EPS = Earnings Per share
NCF = net cash flow
CF(O) = Cash flow from operations
CF(I) = Cash flow from investing activities
CF(F) = Cash flow from financing activities
PE = Price earnings ratio
What three concerns should the financial manager be aware of when analyzing a statement of financial position?
- Liquidity
- debt vs equity
- value vs cost
What does Liquidity refers to?
How easy assets can be converted to cash, without loss in value.
What is defined as Current assets?
The most liquid assets like cash & assets that will be cash within a year.
What is defines as trade receivables?
Amounts not yet received from customers.
What is defines as Inventories?
Raw material used in Production, work in Progress and finished goods.
What is defined as non-Current assets?
The least liquid assets like, Property, equipment. etc. there is also intangible non-current assets, trademark, Patent.
What is pros and cons with high liquidity?
The more liquid a firm’s assets, the less likely it is to experience problems meeting short-term obligations. But they don´t grow so much overtime, So if you invest a lot in liquid assets you sacrifice an opportunity to invest.
Which standards is used in Europe and USA to report the value of assets?
European: IFRS
USA: GAAP
What should you keep in mind when analysing a statement of Profit and loss?
- non-cash items
- time and costs
What are costs in the income sheet but does not affect the cash flow?
Depreciation = avskrivningar. Difference between cash flows and accounting income because of this!
What costs do we have in the short run and long run?
Short run: fixed costs and variable costs
Long run: all costs are variable
What is another way to divide costs?
Period costs and production costs
What is your Average tax rate?
tax bill/taxable income
